Creation of the forum came after it was found out that an existing defense board between both sides was "inadequate to assess policy issues."

"It is important and timely, in taking the way ahead in Philippine-US defense relations, to establish and insitutionalize with the US a policy level consultative mechanism which will serve as the forum for a methodical and comprehensive examination and discussion of strategic issues," Defense Secretary Agelo Reyes said.

The policy forum would also help to broaden the alliance and intensify efforts to combat terrorism, he said.

US President George W. Bush in May elevated the Philippines to a full military ally, calling the Southeast Asian republic a major non-NATO ally. The move would give the Philippines greater access to surplus American military equipment, among other measures.

President Gloria Arroyo earlier Thursday formally received three reconditioned UH-1H helicopters donated by the United States to boost Manila's capability to fight insurgencies.

The three utility helicopters worth a total of 2.76 million dollars are the last of a batch of eight pledged by Washington in 2001.

The air force has 38 Huey helicopters which are used extensively in counter-insurgency operations against communist guerrillas and Muslim separatists in the south.

WAR.WIRE